Chan v. Anthony, et al. was filed in the District Court for Denver County, Colorado on March 1, 2022, asserting claims under the Colorado Securities Act for securities fraud, investment advisor fraud, unlicensed broker/dealer activity, unlicensed investment adviser activity, and unregistered securities.
Tung Chan (“Chan”), Colorado’s Securities Commissioner, brought this action against Defendant David Anthony (“Anthony”) and nine unlicensed investment companies that he owned and operated (collectively with Anthony, the “Defendants”). Chan also included Anthony’s wife as a relief defendant to claw back funds from the scheme used for the Anthonys’ personal expenses.
According to the complaint, Anthony obtained millions of dollars in investor money and invested that money in life insurance settlement products, merchant cash advances, and bonds. Anthony offered these investment services despite not being licensed as a sales representative and through entities that were not licensed broker/dealers. Moreover, the complaint alleges that Anthony failed to properly disclose material facts to potential investors, including his connection to his various companies and the commissions that he received from the investments.
At the heart of the alleged operation, Anthony comingled funds from his various entities such that he could use funds from one entity to pay returns to other entities in a Ponzi fashion. Anthony also received commissions ranging from 21 to 44 percent and totaling approximately $2.3 million without properly disclosing that to potential investors.
This action seeks an injunction against the Defendants that prevents further violations of the Colorado Securities Act. Moreover, Chan seeks restitution, disgorgement, and damages, plus interest, costs, and reasonable attorneys’ fees, related to the Defendants’ unlawful securities activity on behalf of all persons injured by the scheme. Finally, the complaint seeks the creation of a constructive trust on all funds that the Defendants fraudulently obtained from investors.